Low Income Subsidy (LIS)

To help low-income individuals afford the prescription drug benefit, the MMA provides for extra help in paying for premiums, deductibles and co-pays through the coverage gap and in catastrophic coverage.

Individuals may qualify based on two criteria:

• Income in relation to the Federal Poverty Level (at or below) which for 2005 is:
  • $9,570 if single
  • $12,830 for a married couple or family of two
• Asset test which is:
  • Other financial resources which includes money amounts of bank accounts, investments or cash for individual and/or spouse
  • Life insurance policies with a total face value of more than $1,500
    • Dollar amount if converted to cash today
  • Does not include:
    • Home where individual resides or property where home is located
    • Resources used for burial expenses

Individuals whose incomes are below 135% of the federal poverty line and who have liquid assets below $7,500 ($12,000 for a married couple), or who are dual eligible, will:

• Pay no premium or deductible
• Receive coverage that continues through the "doughnut hole," subject to co-pays of $1 and $3 respectively for generic and brand-name drugs if their incomes are below 100% of the federal poverty line, co-pays of $2 and $5 if their incomes are higher, and no co-pays if they are nursing home residents
• Pay no co-pays for covered drugs in the catastrophic benefit

Individuals whose incomes are between 135% and 150% of the federal poverty level and who have liquid assets below $11,500 ($23,000 for a married couple) will:

• Receive a premium subsidy on a sliding scale
• Pay a $50 deductible
• Receive coverage after the $50 deductible that continues through the "doughnut hole," subject to 15% co-insurance
• Pay $2 and $5 co-pays in the catastrophic benefit (i.e., higher coinsurance of 5% does not apply)